Once again, buying a business through a broker will help you in this process. The business broker will explain the process to you and guide you through it.
The business broker will prepare the sale and purchase agreement for you. This is the document used for making an offer to purchase the business and needs to include special conditions to protect you throughout the process. Likewise the owner of the business will want to know that the confidentiality of his business is protected through this process.
The agreement used is an Auckland District Law Society Sale and Purchase agreement (or equivalent territorial document) and contains conditions that protect you, the purchaser and also the owner of the business. The document details information regarding the business along with the price you are offering and the special conditions relative to the offer. At this stage you will also need to pay a deposit. If you are buying through a licenced Real Estate company such as LINK the deposit is held in a trust account until the agreement becomes unconditional. If the conditions upon which you are prepared to buy the business are not met then your deposit is refunded in full without any deductions. The trust account is audited and operated under very strict legal requirements.
Before signing the agreement it may be advisable to have your lawyer review the agreement. When choosing a lawyer it is important to use one familiar with the process of buying a business. Business brokers are not qualified to give legal advice and likewise lawyers are not experienced in selling businesses. Your lawyer will be looking after your interests just as the lawyer for the seller will be doing for their client, and the agreement must be workable for both parties. Ultimately the lawyer works for you and you must have a say in everything that is done.
Once you have signed the agreement it is then presented to the business owner who will either accept it or make the necessary alterations before returning the agreement to you for your acceptance or further alteration. This is called negotiation and the agreement may go back and forth several times until both parties are in agreement. This is the work of the business broker who will liaise between both parties and often, through experience, bring solutions that can result in both parties reaching agreement.